Posted on January 25, 2007

Buying only the insurance you need - Tonik


Blue Cross of California
Tonik plans

Benefits Summary List - Thrill-Seeker (T755)

$5000 deductible

Enrollment Guidelines

The Tonik plans are designed and priced for an Individual policyholder. Only the named policyholder is eligible for benefits under the policy. Other persons, including, but not limited to, the policyholder’s dependents, such as spouse, newborn, legal ward, natural and/or adopted child, are not eligible for coverage under the same policy as the policyholder.

We believe that the cost of covering someone whose health can be predicted to require costly care should not be subsidized by someone with minimal health care needs. That’s why Blue Cross offers various levels of coverage, ensuring an overall balance of risk. To determine individual medical risk factors, all enrollments are subject to medical underwriting.

Blue Cross may change or terminate coverage for all covered persons with the same plan, rating area and deductible (if applicable), including changing rates, with 30 days prior written notice.

Tonik health insurance plans:

Blue Cross of California Thrill-Seeker Tonik plan:


By Don McCanne, MD

Many of the leading proposals for health care reform are running into the same stumbling block. They would reduce the numbers of uninsured by requiring individuals to purchase private health plans, but the premiums for private plans that provide adequate coverage are no longer affordable.

So what is being proposed as a solution? Many contend that individuals should no longer have to pay for insurance benefits that they will never use, but instead they should insure themselves only for the risks that they are more likely to experience. An example of this coverage is the Tonik program for young, invincible thrill seekers. Use of high deductibles in a young, healthy population can keep premiums affordable. Is this wise from the policy perspective?

By prohibiting coverage of spouses and dependents, once the insured passes through his/her stage of invincibility and becomes a more responsible member of society, the Tonik plan will have to be abandoned in order to obtain coverage for the family. But what is also abandoned is guaranteed renewability. The insured is once again subject to medical underwriting: the process used by insurers to deny coverage to those who really need it.

What if, in the interim, the insured developed diabetes or hypertension or HIV infection or depression or any of a host of other problems that people actually do develop? The individual is no longer able to purchase the coverage he/she needs but is stuck with an inadequate plan.

You can be assured that the Blue Cross executives thought this one out carefully. They know that most individuals will drop their plans once they enroll in employer-sponsored coverage. Those that remain in the individual market will want to upgrade to more appropriate plans as their needs and risk tolerance change. The Tonik plans eliminate the unhealthy while providing Blue Cross with a 100% healthy market for those upgrading their plans. It is a devious method of circumventing the guaranteed renewability provisions of state insurance regulations.

There is a theoretical risk for Blue Cross, but they’ve covered that base as well. Suppose other insurance products become less available, and the Tonik plans are stuck with an aging, higher-cost population of former invincibles who are then developing chronic diseases. Simple. Send out notices that in 30 days their premiums will increase eight fold (or whatever). The death spiral then eliminates this would-
be albatross from Blue Cross’ neck.

Since it is impossible to predict which of us amongst the 80 percent who are healthy will shift into the pool of the 20% with major health problems, it is also impossible to define a lower level of coverage that is “only the insurance that you will need.” The only solution that will work is to provide full coverage for everyone and establish an equitable method of funding the pool that will pay for the care needed.

That leads us to the most shocking statement in Blue Cross’ Benefits Summary: “We believe that the cost of covering someone whose health can be predicted to require costly care should not be subsidized by someone with minimal health care needs.”

This is an obscene, explicit statement by the largest health insurer in the nation that we should reject the fundamental purpose of insurance: pooling risk. This industry is using hundreds of billions of our health care dollars to escape their fiduciary responsibility to provide financial security for those with health care needs, as they dump on us, the taxpayers, the burden of footing that monstrous bill. (According to Uwe Reinhardt, two-thirds of our nation’s health bill is paid through the tax system.)

It is long past time for the citizens of this nation to exercise our own fiduciary responsibility by expelling these thieves and establishing our own public insurance program. We not only owe it to ourselves, we’d be negligent if we didn’t do it!

Special request: Please circulate as widely as possible this quote from WellPoint’s Blue Cross of California:

“We believe that the cost of covering someone whose health can be predicted to require costly care should not be subsidized by someone with minimal health care needs.”

Really. Send it out now. The nation must understand that the insurance industry believes that they should no longer be insuring risk. And we don’t need the superfluous administrative garbage that they are selling us now.